Inheritance tax changes on agricultural assets have placed substantial pressure on family farms and intensified financial strain across the farming sector, a review the Labour Government itself commissioned is expected to conclude.

Baroness Batters, the former National Farmers’ Union (NFU) president, is due to publish her findings later this month and will acknowledge the policy of applying a 20 per cent tax on inherited farm assets valued above £1million from April 2026 has generated significant challenges for agricultural businesses.

Ministers have argued the measures were designed to limit tax avoidance by investors and were not intended to disadvantage the majority of family-run farms.

The contents of the report have been the subject of considerable speculation after publication was postponed several times amid calls from farming organisations for its release.

The review was commissioned by the Department for Environment, Food and Rural Affairs in April and completed in October, but it has been withheld from publication on at least two occasions.

Lady Batters will not include recommendations on whether ministers should alter the tax policy, as this was outside the scope of the questions she was tasked with addressing.

A Defra spokesman said the review “acknowledges recent changes to inheritance tax in the farming sector” but confirmed the report could not contradict Government policy under the terms of reference set by former Environment Secretary Steve Reed.

One of the report’s key proposals is the creation of a new public body provisionally named the Sustainable Farm Service.

The planned platform would act as a “one-stop shop” offering advice on business management and agricultural science, including guidance on planting schedules.

Industry sources cautioned that this suggestion could heighten tensions within the sector.

Norfolk farmer James Goodley criticised the approach taken by the review.

Mr Goodley said: “The notion that someone has taken the time to write a report that effectively ignores the single greatest cost any family farm business will face is absurd”.

He told The Telegraph: “We may as well commission a report on how to buy a house without discussing how to actually pay for it”.

Mr Goodley said advances in science are important for farming but questioned whether this reflected the most urgent issues faced by farm businesses.

He said: “If you ask most farmers, very few I suspect would list limited progress in soil science as a major threat any of us are facing right now”.

Some witnesses who gave evidence to Lady Batters said the overall findings would likely be viewed as an implicit criticism of the Government’s approach.

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The inheritance tax changes have already prompted considerable political tension within Labour.

Dozens of Labour backbench MPs from rural constituencies declined to support the measures during a Commons vote last week.

Markus Campbell-Savours, the Penrith and Solway MP, voted against the policy and consequently had the Labour whip withdrawn.

Chancellor Rachel Reeves has since introduced a limited change to the rules allowing married farmers to transfer their inheritance tax allowance of up to £1million to their spouse from April.

The Treasury said this adjustment would enable farms valued at up to £2million to be passed to children without incurring tax.

The NFU said the concession went “nowhere near far enough” to address concerns raised by the sector.

Shadow Environment Secretary Vicky Atkins issued a strong warning about the impact of the policy.

She said: “The family farm and business taxes are destroying the profitability of family farms, through the threat of the taxes themselves and the loss of confidence and investment they are causing”.

She added: “Any report on farming profitability must therefore tackle these death taxes head on.

“If it does not, then that will be further evidence of the Government’s refusal to listen to hard truths about their chaotic farming policies.”

Environment Secretary Emma Reynolds committed to a “reset” with the farming community when she took office in September.

She has since faced continuing concern that the inheritance tax rise could force many family operations to close.

The review is expected to be published within the next fortnight alongside a formal ministerial response.

Lady Batters has been contacted for comment by GB News.